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Cuba and the U.S. will begin to normalize relations

324 points| coreymgilmore | 11 years ago |bloomberg.com

264 comments

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hcentelles|11 years ago

I'm from Cuba, living in Spain right now.

The Cuban government is reluctant to open internet access to the people, despite of they already have the needed bandwith through a submarine cable from Venezuela. Is really fascinating how the Cubans have developed a higly optimized offline distribution channel to share dowloaded content like websites, software, video games, tv shows, movies, with almost the same comsuption patterns of the connected world.

This is a loable move from Obama admnistration and can have a pontentially impact on the near future of cuban internet. The White House fact sheet (http://www.whitehouse.gov/the-press-office/2014/12/17/fact-s...) said:

"Telecommunications providers will be allowed to establish the necessary mechanisms, including infrastructure, in Cuba to provide commercial telecommunications and internet services, which will improve telecommunications between the United States and Cuba."

If Cuban government allow this kind of companies to do business on or with Cuba, that could be huge. But if happens, this could be very slow, sadly.

Disclosure: I'm the cofounder of some Cuba related startups, a classifieds ads site censored by the Cuba government https://www.youtube.com/watch?v=GUmPkb44n_w, they block us by ip and dns, despite of the censorship, revolico is one of the most visited sites in the country, taking into account that cuba has a 5% internet penetration. Also a atypical remittances platform https://www.fonoma.com and crowfunding site for cuban artists shutted down by the USA goverment because of the kind of restriction that they are softening today http://www.yagruma.org

caente|11 years ago

You started revolico!? That's awesome man, I think that project "opened" the mind of a lot of cuban entrepreneurs. I know a few cool projects over there, I also know a lot of plastic artists trying to start projects that connect the "exile" with the people of the island. As you might know, even among those oppose to the regime, there is a lot of bias against cubans from America(unless they are family/friends). I'm also cuban, living in NY, I'd like to help out with whatever I can. You'll find my email on my profile.

ars|11 years ago

> loable

The word you are looking for is laudable BTW.

abreu|11 years ago

Hi. I'm from Cuba, living in Norway. I run a startup in Norway. Would love to meet you if you are in Madrid 19-22 December.

Replace the X with my username. david.gutierrez.X@gmail.com

Un abrazo.

iandanforth|11 years ago

I've visited Cuba on a Canadian passport. Aside from the beautiful beaches the thing that struck me most was the desperate poverty of people living in shacks outside the 5 star resorts.

While I hesitate to predict that this change will be all for the good, I do believe that the poorest in Cuba will benefit significantly from increased trade.

soperj|11 years ago

I felt the same way visiting San Francisco, the abject poverty of the people downtown outside $400 a night hotels is just incredible.

quonn|11 years ago

This might have been your impression, coming straight from Canada. I visited Cuba a decade ago, having traveled in Latin America for > 1 year. I can't say that Cuba seemed to be worse off than many of these other countries.

xyahoo|11 years ago

On the other hand:

- average life expectancy in Cuba is almost the same as the USA (and higher than Mexico, Belize, Bahamas, Brazil, etc.).

- literacy rate in Cuba is higher than that in the USA

- Physicians per 10,000 people: Cuba has 67, USA has 24

In the Ebola crisis, Cuba has been leading from the front.

themartorana|11 years ago

It's the same in India and other countries I've visited. Trade alone won't help. I realize India and Cuba are apples and oranges, but my point is that significant trade doesn't necessarily trickle down to the poorest.

That said, I do hope it does help some people in Cuba who have fallen victim to unnecessary stresses caused by the embargo.

johnward|11 years ago

Other Caribbean countries are like that without embargoes though. The first time I went to the dominican I saw all kinds of shacks made out of whatever they could fine/steal. The second time they built a new highway that avoided this and basically you ran through fields. I was disappointed because I wanted to show my family the real DR.

wizzzzzy|11 years ago

I visited Cuba a month or so ago and one thing that struck me was the way a general lack of wealth didn't manifest it's self in a way in you'd associate with impoverished people in developed countries. The quality of the health and education systems are tangible and one of the biggest points of contention from the people I spoke to seemed to be the lack of internet.

peckrob|11 years ago

> Aside from the beautiful beaches the thing that struck me most was the desperate poverty of people living in shacks outside the 5 star resorts.

This is, unfortunately, not a problem unique to Cuba. I had this very same reaction when my wife and I vacationed in Jamaica. To get to this lush, tropical all-inclusive resort, you spend two hours riding in a minibus across bumpy barely-paved roads through some of the most abject poverty I've witnessed anywhere. It was very difficult to reconcile the insulated world of endless food and finely manicured lawns inside the resort with the world you witness just outside its gates.

xster|11 years ago

I'm also not sure whether the flooding of subsidized US agricultural products will benefit the poorest in Cuba. Take Haiti for instance that went from self sufficiency to a net importer of rice when local producers can't compete with US subsidies.

mladenkovacevic|11 years ago

There have been good things happening in Cuba before this announcement such as issuing private business licenses and allowing people to sell their homes (instead of the old bartering system).

mathattack|11 years ago

When you start from such a low base, there is enormous room for growth. The question is what can they export? Cigars? Medical personnel?

jcmoscon|11 years ago

It's because socialism works!!!

valarauca1|11 years ago

This is actually (amusingly) incredibly unpopular in cigar circles who are calling this the "end of an era".

Most discussions seems to center around the doom and gloom of quality dropping and prices increasing as the US/Cuban cigar market opens and the demand for CC increases.

No discussion on the legality of owning CC changing amusingly. As apparently everyone forgets that smoking a Cuban Cigar can be considered an act of treason currently.

tootie|11 years ago

Or that cigar imports is probably the most utterly trivial and selfish thing to consider in this move.

glup|11 years ago

Agriculture, including tobacco production, accounts for only approximately 4% of Cuban GDP--after heavyweights like tourism (embargo just prevents Americans from going there), gas export, industrial production, and the medical sector. Of greater interest to HN readers than the implications for one trivial luxury good, Cuba has one of the greatest mismatches between literacy (~97%) and telecom development and accessibility (see http://en.wikipedia.org/wiki/Internet_in_Cuba) in the world.

jlebar|11 years ago

> smoking a Cuban Cigar can be considered an act of treason currently.

"Treason against the United States, shall consist only in levying war against them, or in adhering to their enemies, giving them aid and comfort. No person shall be convicted of treason unless on the testimony of two witnesses to the same overt act, or on confession in open court."

Like most of the Constitution, I'm sure that there's way more to understanding this section than reading the written words. Nonetheless I'm skeptical of the claim that smoking a cigar could be considered treason.

johnward|11 years ago

My understanding, as a non cigar smoker, is that the quality of Cubans has decreased and they are only popular because of illegality of them.

Someone|11 years ago

Prices of American cars from the fifties will drop, too.

Longer-term, I also expect fierce legal battles over the ownership of houses on Cuba.

joezydeco|11 years ago

The timing seems really clever here.

The USA and OPEC flood the market with oil (literally), crashing prices and sending the Ruble into a spiral. Just as Cuba starts to worry about Russian support going forward, the USA swoops in to provide some economic bracing.

sremani|11 years ago

I think this move effects Venezuela more than Russia. It is Venezuela that provides cheaper oil cuba in return for many services like healthcare etc. Now that oil is already cheap, Cuba does not need for patronage of Venezuela.

glup|11 years ago

This analysis is a little off-- Cuba has received only symbolic support from Russia since the fall of the USSR. However, dynamics in the oil market are significant for Venezuela, their chief ally (and main supplier of energy resources!).

encoderer|11 years ago

I think you're giving these people way too much credit. As if the shale oil boom was a plot all along. And it doesn't seem like they've had much support from Russia for most of the last 25 years so why would they worry about losing it now?

I think it's tempting to connect the dots. But they're just dots.

hughw|11 years ago

Literally?

lumberjack|11 years ago

Since this is HN, does anyone know what the IT sector is like in Cuba?

Apparently they have a university dedicated to IT stuff[1] but I don't read Spanish and I couldn't really find any projects/research page on there. The only thing that seems to be portrayed is a Linux distro called Nova.[2]

[1] http://www.uci.cu/ [2] http://www.nova.cu/

arenaninja|11 years ago

On your second link, there's a great pun on "HumanOS", which in Spanish simply means "Humans".

On the university site, there's a few hidden links to Cuban Mozilla fans[1], a digital publication for open source software [2], a youth-targeted site for open-source users[3] (seems down), and a women-targeted site for IT [4]. Note that there's more, but everything seems to be down at the moment, it might be the HN effect

[1] http://firefoxmania.uci.cu/ [2] http://swlx.cubava.cu/ [3] gutl.jovenclub.cu [4] http://haciendoweb.upr.edu.cu/

ecoqba|11 years ago

There are lot's of different projects internally. You have to remember that the cuban people does not have direct internet access, so is harder for Cubans to distribute their open source projects.

brianbreslin|11 years ago

Here in Miami there are a number of Cuba initiatives for IT/tech education and entrepreneurship/startups. Happy to put you in touch with people if you're interested.

jmr0|11 years ago

My parents and I left Cuba when I was a child and proceeded to live in various parts of the world before eventually settling in the US. I would like to go back and visit some relatives there at some point, and as a Cuban-born naturalized American citizen I know it is legal for me to do so even currently, but I was informed that I couldn't actually enter Cuba with only an American passport. The Cuban govt requires that I enter as a Cuban citizen, which means obtaining a Cuban passport that costs $200 to renew every 2 years [0]. I'm sure this is mostly just an easy way of extracting money, but I sure look forward to official diplomatic relations being established and hope some of these requirements change -- I don't feel very comfortable entering Cuba as a Cuban citizen and not knowing where my rights end or begin.

[0] http://en.wikipedia.org/wiki/Cuban_passport

jpatokal|11 years ago

The passport you use is irrelevant: if Cuban still considers you a citizen, and decides it wants you to do military service or something, you're screwed even if you entered on a US passport.

I'd recommend formally renouncing your Cuban citizenship (and getting the documentation to certify this) if you want to be 100% sure there are no hassles.

skywhopper|11 years ago

I'm thrilled to see this. This is the sort of hopey changey I was looking for from Obama. Maintaining the status quo in re Cuba is just mindless stubbornness at this point.

Someone1234|11 years ago

Agreed.

It seems like people commonly raise the fact that Cuba still jails political dissidents. However, while accurate, it ignores the many MANY countries the US hasn't embargoed which do similar or worse.

For one example, the US and Saudi Arabia are "best buddies" but yet the Saudi government is often doing extremely anti-freedom stuff. I mean this is the only country on earth where women are forbidden from driving.

So my point is less "Cuba is the good guy" and more "if they're going to continue the embargo then keep it consistent, hit Egypt, Pakistan, China, Yemen, and so on" for it also.

sremani|11 years ago

In 2008 G W Bush has removed North Korea from Embargo list, and embargo has to be renewed every year based on "some" Enemy Act of 1917. Cuba is the only country in US embargo list, I understand it is personal as Cuba is just few miles away from US, but still the embargo is inhumane and people are suffering. John Oliver has a very interesting piece on his HBO show.

infecto|11 years ago

Unfortunately I do not think this is the full truth. I believe there should not be an embargo BUT the embargo is not the main cause of poverty in Cuba.

Cuba has a huge tourism industry. A lot of the business that serve tourists are state owned. Where does this money go? Everything from hotels to restaurants are state owned. Who is profiting here?

I think at this point its less personal and more choice. Cuba chooses to run its govern and keep their people in poverty, the US chooses to keep them on an embargo list. Comparing this to Mexico is a poor example. There is ample current trade with Mexico that if cut off, would hurt the country. The US has not traded with Cuba for a LONG time but has traded with most other world super powers. Nobody here to blame but the Cuban government.

refurb|11 years ago

The one thing I don't understand is how the US embargo is to blame for the lackluster Cuban economy. Cuba is free to trade with most Western countries including the EU and Canada.

How much of the economic misery is due to the Castro government and how much is due to the US embargo?

drzaiusapelord|11 years ago

Sorry but the embrago doesn't stop them from trading with many of their neighbors. I'm getting sick of the left giving the horrible Castro regime a free pass by hysterically yelling, "embargo" everytime Cuba comes up.

Cuba's main problem is its leadership. The US coaxing it to a free market system that respects human rights and property rights is only good for Cuba. The Castros were more than willing to continue to starve their people and become the West's North Korea.

>John Oliver has a very interesting piece on his HBO show.

Maybe you should get your opinions from something other than lowest common denominator appeal comedians. Start here:

http://en.wikipedia.org/wiki/Human_rights_in_Cuba

and here:

http://www.hrw.org/world-report/2013/country-chapters/cuba

and here:

https://www.gov.uk/government/publications/cuba-country-of-c...

Please stop romanticizing the Castro regime.

JSeymourATL|11 years ago

> The changes follow a rare private intercession by Pope Francis, the Catholic Church’s first Latin-American pontiff, secret meetings between Cuban and American delegations at the Vatican. *Hit-tip to Pope Francis...bien hecho.

MichaelGG|11 years ago

I found that the most odd thing here. Obama personally needed a Pope to remind him about Cuba? I mean, it's good a church is doing something beneficial but it sounds strange.

beloch|11 years ago

First, it's important to note that the economic sanctions on Cuba require the action of the Senate to be lifted. That's virtually a foregone conclusion however.

U.S. policy usually tends to favour business. That's why the economic sanctions on Cuba were bound to be removed sooner or later. At present, there are some products (e.g. compressors and other items requiring a large foundry to produce) that are very difficult and expensive to get in Cuba because most companies that produce them are either American or owned by American companies. Smaller companies from countries such as Canada have made a practice of "bootlegging" for the Cubans. In recent years it has not been uncommon for a compressor skid to be produced in Texas, shipped to Alberta via rail, shipped to the East coast through Canada via rail, and finally shipped to Cuba.

The reason sanctions against Cuba are finally being dropped is probably related to the death or extreme old age of most everyone who can remember having property snatched away from them when the Cubans nationalized everything after the revolution. Subsequent generations of Cubans and americans have been brought up to distrust each other though. It won't be as easy as some think for U.S. companies to march back into Cuba and set up shop again. Companies that have been quietly running mines and building power plants for the Cubans over the last few decades will likely have the edge. It's going to take time and patience for trust to be restored.

arenaninja|11 years ago

I hope this doesn't out me as short-sighted, but I'm looking forward to a vacation there in the near future!

Vaskerville|11 years ago

Me too. And, more coincidental, I'm moving to Port au Prince in just a couple months!

xyahoo|11 years ago

There's more to the Cuban embargo than meets the eye. It is true that the Southern Florida Cuban exile community wields a disproportional amount of influence. Florida is almost equally divided between Democrats and Republicans, and is a big state in terms of electoral votes; so when a sizeable block like the Cuban exiles votes a certain way, it can tip the balance.

However, that is not the entire story. If we (US) were really that concerned about the lost property of the Cubans expelled by Castro, we would also look inward and ponder the fate of the British supporters kicked out in 1776; the KMT supporters kicked out by Mao; etc.

If we can trade with China, Russia, etc. then there's no reason we can't trade with Cuba. In fact, the opening of the borders with USSR is often listed as one of the key factors in bringing it down; so why not do the same with Cuba?

mcantelon|11 years ago

Relations, of course, aren't based on morality, they're based on strategy. Otherwise the US wouldn't have allies like Saudi Arabia and Uzbekistan.

jstalin|11 years ago

Outstanding. This is long overdue.

peterwwillis|11 years ago

It's kind of funny, but this won't actually bring all warm-n-fuzzies from the people most affected by it. The refugees/dissidents in Miami are saying this isn't going to change anything because it allows the Castro regime to double down on economic growth from new business relations with the US. The non-refugees are saying this will make immigration worse. The people both on the island and those illegally importing products into the country from Miami may face higher prices and tighter restrictions. And if political reform comes, it could be at the cost of dismantling the relatively strong public health and education systems.

flyinghamster|11 years ago

I get the feeling that the embargo will last until Fidel reaches room temperature.

I do find it interesting that in recent years, Bacardi has been playing up its Cuban heritage. I suspect that they're itching to get back, but that whole issue of returning confiscated property stands in the way. Will Cuba end up with something like the Treuhandanstalt in post-reunification Germany?

Shivetya|11 years ago

I figure the last two years of President Obama's term are going to be one wild ride. He has clearly shown he could not if he harms others in his party politically and he certainly could care less what the Republicans think.

Freed from any need to cooperate; now that Republicans are in control; with Congress its going to be fun. Why do I say no need, with Reid in charge of the Senate he had to play by party rules, he is free of that.

Some moves will definitely be for the good, some may not be. Regardless it should be chaotic if not fun to watch

jpatokal|11 years ago

The line about opening an embassy in Cuba as soon as possible is a bit funny, since the US has long had an embassy in all but name: https://en.wikipedia.org/wiki/United_States_Interests_Sectio...

And while that's technically only a "section" of the Swiss embassy, a glance at a photo of the place makes it pretty clear that there's a bit more going on.

jeffwass|11 years ago

I've been to the Cuban interest section in Washington DC several times. It's not really an embassy in that diplomatic functions and freedoms don't exist like proper embassies.

The ambassador's freedoms are quite limited. Eg, at some point he was not allowed to leave the confines of the DC beltway. Diplomatic immunity be damned. Really sucked for us planning an event in my Baltimore uni for him to speak at, where the travel restriction came into effect just days before and we had to resort to video conf.

raldi|11 years ago

What are we going to do about all the trademark conflicts? US rum and cigar companies stole the brand names of famous Cuban companies, because they knew they could get away with it.

To see what I mean, Ctrl-F dueling on http://en.m.wikipedia.org/wiki/List_of_cigar_brands

peterwwillis|11 years ago

??

From the Bacardi wikipedia:

"Ospina describes how the Bacardi family and Company left Cuba after the Castro regime confiscated the Company’s Cuban assets on 15 October 1960; in particular, in nationalizing and banning all private property on the island as well as all bank accounts. However, due to concerns over the previous Cuban leader Fulgencio Batista the company had started foreign branches a few years prior to the revolution; the Company moved the ownership of the Company's trademarks, assets and proprietary formulas out of the country to the Bahamas prior to the revolution as well as constructing plants in Puerto Rico and Mexico after Prohibition to save import taxes for rum being imported to the US. This helped the company survive after the communist government confiscated without compensation all Bacardi assets in the country."

"More recently, Bacardi lawyers were influential in the drafting of the 1996 Helms-Burton Act which sought to extend the scope of the United States embargo against Cuba. In 1999, Otto Reich, a lobbyist in Washington on behalf of Bacardi, drafted section 211 of the Omnibus Consolidated and Emergency Appropriations Act, FY1999 (Pub.L. 105–277), a bill that became known as the Bacardi Act. Section 211 denied trademark protection to products of Cuban businesses expropriated after the Cuban revolution, a provision keenly sought by Bacardi. The act was aimed primarily at the Havana Club brand in the US. The brand was created by the José Arechabala company and confiscated without compensation in the Cuban revolution. The Havana Club trademark had been registered by the Cuban government in the United States without permission of the rightful owners. The new law invalidated the trademark registration. Section 211 has been challenged unsuccessfully by the Cuban government and the European Union in US courts; however, the act has been ruled illegal by the WTO (August 2001). The US Congress has yet to re-examine the matter."

Basically, Cuba stole some brands after the revolution, so the U.S. said "fuck you, you can't trademark a brand you stole from its rightful owners". The EU and WTO have a problem with that, but luckily the U.S. has never given a shit what the EU or WTO says.

Zhenya|11 years ago

Russia gets North Korea - US goes for Cuba in almost the same day. Interesting.

glup|11 years ago

The title of the Bloomberg article "Cuba’s Half Century of Isolation to End" perpetuates a major misconception for US citizens. Cuba isn't isolated from the rest of the world (in the manner that North Korea is) -- it's just the US and Cuba. The island is fully connected as a tourist destination for Canadians, Latin Americans, and Europeans and they import consumer goods from Korea, China, Vietnam, etc. There are major differences (e.g. the military apparatus has controlling interests in nearly all business ventures, including those with foreign firms) but "isolation" is a pretty inaccurate characterization.

dragonwriter|11 years ago

The retaliatory policy the US has against any entity doing business with Cuba severely limits business engagement with Cuba, since firms that engage in many kinds of business with Cuba risk retaliatory asset seizures if assets come within the jurisdiction of US courts. While foreign trade with Cuba is less constrained by the embargo than direct US trade, it is inaccurate to say that the embargo only affects direct trade between US and Cuba.

spacefight|11 years ago

Nice. Whats's next? Close Gitmo? Give back the lease?

kmfrk|11 years ago

Gitmo requires the approval of Congress - guess what blocked it from happening.

This is an executive action.

serve_yay|11 years ago

I am not sure why this would affect that, as far as I know that part of Cuba is considered to be US soil.

unprepare|11 years ago

I have to think this is related to tensions with Russia and avoiding a second missile crisis. I wonder if there will be a reaction from Russia about this news.

ceejayoz|11 years ago

Uh, what? Cuba isn't a Soviet vassal state any more.